BP Continues Biofuels Backout

BP is continuing its biofuels backout with the announcement that it is abandoning its $300 million cellulosic project in Highlands County, Florida. This is the second major announcement of the company moving away from the production of renewable energy. Last December, the company exited the solar business. According to an interview with Matt Hartwig in the Washington Post, the company will continue to focus its U.S. efforts on research and development and licensing its technology.

“Ethanol is not something a lot of people are interested in investing money in,” said Mark Schultz, an analyst at Northstar Commodity Investment Co. in Minneapolis, to the Post. “Corn-based ethanol hasn’t been profitable for about a year. BP is seeing that this isn’t the right street to go down anymore.”

Many advanced biofuels players responded to the news today including Brooke Coleman, the executive director of the Advanced Ethanol Council. “BP has been reallocating its resources when it comes to biofuels for some time. BPs’ decision today signals a move by that company away from that particular project. This happens all the time in the oil, gas, and biofuel industries. As BP pulls back in Florida, the first movers in the space continue to move forward with commercial projects in more than 20 U.S. states. We are expecting first commercial gallons of cellulosic ethanol to come online by the end of the year, which is a tremendous accomplishment in this economic climate.”

Many of the 20 companies mentioned by Coleman are members of the Biotechnology Industry Organization (BIO) and Executive Vice President Brent Erickson said of the news, “BIO represents more than twenty companies in the advanced renewable fuel industry that continue to make visible progress in building cellulosic biofuel facilities. In order to make the large capital investments necessary to commercialize advanced and cellulosic biofuels, companies need to know that the U.S. is committed to achieving energy security and that the Renewable Fuel Standard is here to stay.”

DuPont is one company that has been committed to developing advanced biofuels. They are engaged in a joint partnership with BP to develop biobutanol and are also developing a cellulosic ethanol plant using corn stove and cobs in Nevada, Iowa.

“DuPont reconfirms our commitment to break ground on one of the first commercial-scale cellulosic ethanol facilities in the United States later this year. With an over $200 million investment in this Iowa biorefinery, DuPont is proud to lead the global renewable fuels industry and play a key role here at home in America’s domestic clean energy future. This biorefinery will process corn stover – an agricultural byproduct –to produce 28 million gallons of cellulosic ethanol per year,” said James Collins, president of Dupont Industrial Biosciences.

“DuPont recognizes the crucial role renewable fuels are already playing in our energy strategy, and is one of a growing number of companies pursuing the many and varied investment opportunities in this critical sector of the nation’s economy,” added Collins.

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